Alan Bjerga: Hello and welcome to the Dairy Defined podcast. The USDA's Federal Milk Marketing Order hearing is in full swing, and so far we've learned a lot. We've learned that farmer witnesses overwhelmingly support the National Milk Producers Federation's proposals for FMMO modernization. And that's no surprise given its unanimous support by the Board of Directors last spring. We've also learned this support doesn't mean the hearing's a cakewalk. It's featured tough questions and a demand for rigorous analysis. Providing some of that analysis has been Senior Director of Economic Research and Analysis, Stephen Cain, who joins us today from Carmel, Indiana. Thank you for taking time from a grueling process to talk to us.
Stephen Cain: Thanks, Alan. We've been going now for a few weeks. Folks are well into the process. We've really gotten through three main key proposals, especially from the National Milk side. First one was updating the skim milk composition factors. That took a lot longer than I think we all realized. I think everybody was still getting the kinks worked out there with the lawyers and getting everything settled out. But we've gone through the updating skim milk composition factors. We just finished up removing the barrels from the protein component of the Class III pricing formula. That took a while as well, and we're still in the midst of working on updating the make allowances. That's a key component as well, amidst this whole process, so we're still working through that one right now.
Still left to do, especially from the National Milk side, we have another proposal that is returning to the higher of, from the average of the Class III and IV plus 74 cent Class I mover. We still have that to do. And then lastly, the Class I differentials, updating that differential map, which is not going to be an easy lift, but we're working our way towards it.
Alan Bjerga: What's been the biggest surprise for you so far?
Stephen Cain: Yeah, at this point, I don't think we have any really big surprises. We knew this was going to be a long process, so we're working through it. I think at this point, everybody's just still trying to get their voices heard, make sure that everything's put into the record that they want put into the record. So we're moving slowly, but we're making progress. But at this point, no real big surprises. We're just working our way through this long process.
Alan Bjerga: You mentioned about getting information on the record. Tell us a little bit about the farmer support you've seen and what role that plays as this process goes forth.
Stephen Cain: Yeah, that's a really big piece for the USDA. They want to hear from farmers. This is a federal program that is meant to support farmers and is continued at the behest of farmers. That's the USDA really wants to hear from producers, get their take on all of these key issues. We've had roughly two dozen farmers testify at this point, many more to come. So USDA has really wanted to hear from them, and that's a big piece to make sure that these proposals that are being put forth are the right things to do.
Alan Bjerga: You seem very even tempered. We're several weeks into this process, and nerves can fray. Is there anything that you just wish would go away, Stephen?
Stephen Cain: Yeah, well, the processor opposition drop proposals, that'd be great if they'd just agreed with us, that would make all of this a lot easier. But no, we're working with the process. This is a judicial proceeding. There's some bureaucratic stuff that just kind of bogs down the system at times. Seems we're going at a snails pace. But the biggest thing, I joke about processor opposition, but one of the pieces that we've really tried to do with our proposals is to make sure that it's a well-rounded package that's addressing the entire federal order system.
To make sure that we're not just updating the pieces that benefit us, but updating it as a package to make sure the industry moves together forward, together, and we benefit the entire industry. Some of the process and proposals have been a little bit on the cherry picking side, picking the ones that help them and not the rest of the industry. But it's been a little frustrating at times. But again, we're just making sure that we get everything on the record that USDA needs to make informed decisions, and we think we're building a strong record to support that.
Alan Bjerga: Well, and that comprehensive approach has kind of been the mission since day one. Do you feel like you're following through on this effectively?
Stephen Cain: Yeah, yeah. We worked, again, two years in the process to build consensus among our entire co-op group, and we've done that. We had unanimous support from our board on our proposals. We have a well-rounded package that's supported by the entire industry. So that's the big piece here, again, is just making sure that we get everything we need to into the record to make sure the USDA has the right information they need to make the best decisions to make sure their orders are operating as effectively as they can.
Alan Bjerga: Anything else we should know?
Stephen Cain: We're in the middle of the process. It's going to continue to be a long process. We'll keep you updated as we go along, but we're excited to be finally making some of these needed adjustments to the orders and long process, but we're getting through it.
Alan Bjerga: Well, I appreciate your time, Stephen. I know we have a penciled in podcast taping set for about a month from now. Are we going to actually have to do that?
Stephen Cain: Maybe. It's a long process. Again, we're getting into some concerns about a potential government shutdown that might happen later on. We're hopeful that that won't impact us, but we're trying to get this wrapped up in a timely manner so everybody doesn't lose their sanity through all this. So hopefully we'll be done in a month, but we'll see.
Alan Bjerga: We've been speaking with NMPF Senior Director and Economist, Stephen Cain. NMPF has a webpage with resources and updates on the hearing. Just go to nmpf.org, find the blue bar in the middle of the page and give it a click. Also, note that farmers who are interested in participating are encouraged to testify virtually at the hearing. You can also find that information on our FMMO webpage or contact us at info@nmpf.org for more information. Thank you for joining us.